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INDEPENDENT DIRECTORS’ RESOURCE PROVISION CAPABILITY IN PUBLICLY-LISTED COMPANIES IN MALAYSIADownload This Article
Saeed Pahlevan Sharif, Yeoh Ken Kyid
We explore the notion that independent directors’ primary role in developing capital markets is to act as key providers of distinctive resources and/or networks that are valuable to their respective firms. These resource provision capabilities become even more crucial in times of financial crisis. With a random sample of 289 companies listed on Bursa Malaysia, we test a set of hypotheses using paired sample t-test (for both pre-crisis (2007) and onset-of-crisis (2008) periods). Our results show that in times of crisis, companies exhibit a greater tendency to appoint more independent directors, especially those who (i) possess certain skills/resources that their firms specifically lack, and/or (ii) have strong political connections to secure government projects/funding/support.
Keywords: Resource Dependence Theory, Resource Provision Capability, Independent Directors, Malaysia, Global Credit Crisis
How to cite this paper: Sharif, S. P., & Kyid, Y. K. (2014). Independent directors’ resource provision capability in publicly-listed companies in Malaysia. Corporate Ownership & Control, 11(3), 113-121. http://dx.doi.org/10.22495/cocv11i3p8